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Most expensive real estate markets in 2009

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Most expensive real estate markets in 2009

No surprise - Monte Carlo is No 1 in the Global Property Guide’s list of World’s Most Expensive Residential Real Estate Markets 2009, more than twice as expensive, at US$45,000 per square metre, as the runner up.
Battling for the number 2 position are prime central Moscow and London.  Prime central Moscow’s US$20,853 per square metre price tag slightly outpaces core Prime London’s US$20,756 per square metre, though it is fairer to say the two cities are neck-and-neck.
London residential property prices have fallen for much of 2008, while Moscow property price declines only started in the last quarter, allowing Moscow to catch up with London.  Both countries have experienced strong currency declines.
Tokyo and Hong Kong come in fourth and fifth, respectively.
New York, the only US city included in the survey, is 6th, with an average price of US$15,000 per sq. m.
Completing the top ten most expensive real estate markets are two European cities (Paris at 7th and Rome at 9th) and two other Asian cities (Singapore at 8th and Mumbai at 10th).  Average prices range from US$9,000 per sq. m. to US$12,000 per sq. m.
The figures are based on the average price of a 120 sq. m., good-condition high-end used apartment in the city centres of more than 110 cities around the world, typically the economic centres where most foreigners are likely to buy.  The data was collected during 2008.  The US dollar exchange rate used is that of January 27, 2009.

Most expensive property markets(based on 120 sq. m. apartment in city-centre )

Rank  Country        City/region    Ave price (us$/sq. M.)

1          Monaco        Monte Carlo                   47,578

2          Russia           Moscow                       20,853

3          UK                 London                         20,756

4          Japan             Tokyo                           17,998

5          Hong Kong  Hong Kong                        16,125

6          USA               New York                      14,898

7          France           Paris                             12,122

8          Singapore     Singapore                          9,701

9          Italy               Rome                              9,166

10        India              Mumbai                            9,163

Bargain hunters’ dream

For global bargain hunters, there are several places where property prices are relatively cheap, for example parts of the Middle East, Latin America and Asia.
Cairo, Egypt is one of the cheapest cities in the world, with prime city centre prices at around US$600 per sq. m.  Another Middle Eastern capital in the bottom 10 is Amman, Jordan, with average city centre prices at US$1,150 per sq. m.
Three Asian cities are included in the 10 cheapest, all located in rapidly growing and heavily populated countries, Bangalore in India, Chengdu in China and Jakarta in Indonesia.
Chengdu, damaged during the magnitude 8.0 earthquake in 2008, remains a vital economic, transportation and communication hub in the heartland of China.
Indonesia was the last country to recover from the 1997 Asian Financial Crisis.  However, the economic reforms implemented by the Yudhoyono administration are setting the stage for steady economic growth.
Five Latin American cities complete the list of 10 cheapest cities for property buyers - Concepcion and Santiago in Chile, Quito in Ecuador, Managua in Ecuador, and Lima in Peru.
The same countries also tend to earn good rental yields.


Least expensive property markets(based on 120 sq. m. apartment in city-centre)

Rank  Country       City/region   Ave price (us$/sq. M.)

112      Egypt           Cairo                                574

111      India             Bangalore                       657

110      Chile             Concepción                    669

109      Ecuador       Quito                               820

108      China           Chengdu                         999

107      Nicaragua    Managua                         1,080

106      Indonesia    Jakarta                            1,102

105      Jordan          Amman                          1,1500

104      Peru              Lima                              1,154

103      Chile             Santiago                        1,2211


Rental yields are generally below 5% in most European cities, suggesting that property is still overvalued.
Rental yields are generally below four percent in the following cities: Munich, Barcelona, Vilnius, Helsinki, Madrid, Rome, and Nicosia.  Rental yields in Europe are lowest in Andorra at 2.2% and Athens at 2.7%.
Rental yields are between 4% and 5% in major cities such as Brussels, Tokyo, Berlin, Moscow, Copenhagen, Warsaw, New York, Shanghai, Paris, London and Geneva.
Returns from rental investments are also relatively low in key Asian cities such as Singapore and Hong Kong and in almost all Indian cities (Bangalore, New Delhi, and Mumbai).
Only six cities have rental yields of more than 10%, led by Chisinau with an average gross rental return of 14%.  The Moldovan capital is followed by Cairo, Jakarta, Manila, Skopje and Lima.
High returns can also be expected in Latin American cities.  Yields range from 8% to 10% in Panama City (Panama), Bogota (Colombia), Managua (Nicaragua), Santiago (Chile), Buenos Aires (Argentina), and Quito (Ecuador).
Rental yields in Kula Lumpur (Malaysia) and Amman (Jordan) are also typically above 9%.


Highest gross rental yields (%)

Rank   Country                   City/region        Annual yield

1           Moldova                  Chisinau             14.17%

2           Egypt                       Cairo                 12.00%

3           Indonesia                Jakarta                11.27%

4           Philippines              Manila                 10.99%%

5           Macedonia              Skopje                 10.11%

6           Peru                          Lima                  10.09%

7           Panama                    Panama City       9.98%%

8           Jordan                      Amman               9.73%

9           Malaysia                  Kuala Lumpur      9.22%

10         Colombia                 Bogota                9.19%%

11         Nicaragua                Managua             9.12%

12         Chile                         Concepción       9.04%

13         Netherlands            The Hague           8.97%

14         Chile                         Santiago           8.87%

15         Argentina                Buenos Aires       8.85%

16         Jamaica                    Kingston            8.80%%

17         Ecuador                   Quito                   8.77%

18         Bahamas                  Nassau               8.37%

19         Russia                      St. Petersburgg     8.15%

20         Trinidad & Tobago      Trinidad               8.14%

House price movements

The recent house price boom and bust defeats the traditional notion that real estate prices are based primarily on local conditions.
The relatively low cost and ease of moving capital around the world has made it easier for people to invest in real estate markets in several countries.  This is complemented by the relatively lower cost of international air transport.  Several countries have also removed foreign ownership restrictions, a move encouraged by the Organization for Economic Cooperation and Development (OECD) and the European Union.
The result of these changes has been a remarkable increase in cross country real estate investments – helping make the boom, and the bust, truly global.
(Source - Global Property Guide)